Zillow is laying off hundreds of employees as part of its growth strategy, CEO Jeremy Wacksman announced Tuesday.

More than 500 Zillow employees, or about 7% of its workforce, were let go, one of the steepest staff cuts in company history, behind a 25% slice following the end of its Zillow Offers service in 2021.

This was also Zillow's second major personnel trim this year. The company fired about 200 employees in January due to performance issues.

"Continuing to grow at scale requires us to work differently than we do today," Wacksman said in the announcement. "In support of that goal, we've made changes to our organization that require the elimination of some roles today. These changes are about ensuring we have a disciplined cost structure and getting more efficient, with the right people in the right positions."

Wacksman said Zillow continues to "outperform the category" despite a slow housing market with rising mortgage rates. The company continues to build an "integrated experience" that has produced results for its business, as well as renters, buyers, sellers and real estate professionals, according to the announcement.

The news came a day before Zillow's second quarter earnings release, which is scheduled for market close on Wednesday. Analysts expect Zillow to report earnings per share of 45 cents on revenue of $758 million, which would mark year-over-year growth of 13.3% and 15.7%, respectively.

In the first quarter, Zillow exceeded expectations by 15.2%, posting an earnings per share of 53 cents. It also reported an 18% annual increase in revenue to $708 million and $46 million in net income, up from $8 million a year earlier.

Recent legal trouble

Zillow has been accused multiple times this past year of steering buyers to its mortgage unit, Zillow Home Loans. 

Homebuyer Alucard Taylor filed a lawsuit in September, alleging Zillow's Flex agent referral program was deceptive and led to high fees. It said the company did not disclose the referral fee it collects from Flex agents, which the plaintiff claimed violated the Real Estate Settlement Procedures Act.

The complaint was combined with three other lawsuits in the following months, two claiming the company violated the Racketeer Influenced and Corrupt Organizations Act and another RESPA claim from an Alaskan homebuyer. 

The expanded case was dismissed last month because it lacked statutory standing.

Zillow is still battling steering lawsuits, as a case filed by a Seattle real estate agent has yet to be resolved.